Trade deals between Bangladesh & India

Commerce Minister Tofail Ahmed exchanges views with the visiting delegation of Indian Commerce Ministry led by Minister Suresh Prabhu at the State Guest House Padma in the capital on on Seot.26. Photo - PID

It may recalled that India and Bangladesh share a 4,156 km (2,582 mi)-long international border, the fifth-longest land border in the world. India surrounds Bangladesh from north, east and west with south open to the Bay of Bengal. There also Indian Navy dominates. Often Bangladesh is known as India-locked country.

In the above context, Indian Minister of Commerce, Industry and Civil Aviation Suresh Prabhu‘s visit to Bangladesh is important. He arrived here on 24th September evening on a five-day visit to Bangladesh to discuss trade and other bilateral issues.

On 26th September , (2018), Bangladesh has reportedly agreed to ink the Comprehensive Economic Partnership Agreement (CEPA), a free trade agreement that will boost economic ties between the two friendly countries.

The announcement was made by Commerce Minister Tofail Ahmed at a press conference after a meeting with visiting Indian delegation led by his counterpart Suresh Prabhu in Dhaka.

Suresh Prabhu assured that India, upon request of Bangladesh, was working to withdraw the anti-dumping duty on Bangladesh’s jute and jute-made products. The two countries will be implementing six more border haats, an initiative dubbed by the World Bank as exemplary steps to regional trade, along bordering areas of the two countries.

It may be recalled that leading companies from India and Bangladesh signed 13 MoUs and agreements for power, energy, logistics, education and medical sectors, including the controversial Rampal thermal power plant, worth nearly $10 billion in April, 2017. This will further strengthen the bilateral economic partnership between the two neighbouring countries.

The above deals were reportedly signed in the presence of Prime Minister Sheikh Hasina at a programme titled India Bangladesh Business Forum which was organised by Ministry of External Affairs, India, in association with the Confederation of Indian Industry (CII), Federation of the Indian Chambers of Commerce & Industry (FICCI) and Associated Chambers of Commerce of India (ASSOCHAM) at Hotel Taj Palace in New Delhi.

The deals include: a facility agreement between Bangladesh-India Friendship Power Company (BIFPCL) and Exim Bank of India for debt financing for construction of 1,320MW Maitree Power Project in Rampal of Bangladesh at a cost of $1.6 billion.

However, the location of the thermal project near the ecologically-sensitive Sundarbans area has reportedly triggered an outcry among environmentalists in Bangladesh.

The MoUs include an implementation and power purchase agreement between Reliance Power and the Ministry of Power, Energy and Mineral Resources for the first phase (718MW) of the 3,000MW power project at Meghnaghat, entailing $1 billion (out of a total proposed investment of $3 billion).

It may be noted that the above development came following meetings with the high-powered Bangladeshi business delegation accompanying Bangladesh Prime Minister Sheikh Hasina on her four-day visit to India in April, 2017.

It is reported that the Indian Prime Minister Narendra Modi said his counterpart Sheikh Hasina’s visit to Delhi marked another golden era in the friendship between two people and nations. Modi also lauded Hasina’s leadership in strengthening the ties between the neighbouring nations and in fighting terrorism.

“The extraordinary transformation in our relationship and achievements of our partnership are a clear recognition of your strong and decisive leadership,” Modi said, adding that Hasina had been leading Bangladesh on a trajectory of high growth and development.

Modi reportedly said “We in India rejoice in our ties with Bangladesh. Ties that have been forged in blood and generations of kin-ship. Ties that seek a better and secure future for our people.” He reportedly added that the partnership between the two countries brought prosperity to their citizens. It also worked to protect them from forces of radicalism and extremism.

“We have the greatest admiration for Prime Minister Sheikh Hasina’s firm resolve in dealing with terrorism. Her government’s ‘zero-tolerance’ policy towards terrorism is an inspiration for all of us,” said Modi, pledging that peace, security and development of the two nations would be at the centre of their engagement.

Referring to the defence agreement, he said the leaders had taken a long-overdue step by signing an agreement on close cooperation between their armed forces, and announced a $500 million line of credit to support Bangladesh’s defence-related procurement.

In implementing this credit, he said India would be guided by Bangladesh’s needs and priorities.

“We specifically looked at charting new avenues and tapping fresh opportunities in advancing our relationship. We want to build cooperation in new areas, especially some high-technology areas that have a deeper connection with the youth in both our societies, We are a long-standing and trusted development partner of Bangladesh. India and Bangladesh are also determined that the fruits of our cooperation must benefit our people,” Modi reportedly said.

We are informed by reports that the areas, in which the two nations will be co-operating each other, include electronics, information technology, cyber security, space exploration and civil nuclear energy. Notably, Bangladesh’s trade gap with India is heavily lopsided towards India. According to statistics, last fiscal, the gap was over US $7.7 billion. It is not unusual to find a large business partner to have impressive balance on trade between Bangladesh and India.

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